Small Business Instant Asset Write off

Government has Extended and Increased the threshold for the Small Business Instant Asset Write-Off…

Back in 2015, the government increased the instant asset write off threshold from $1,000 to $20,000 for eligible small businesses that use the simplified depreciation rules.

In short, you may be eligible and claim an immediate deduction for the business portion of each asset (new or second hand) costing less than $20,000 if:

  • you had a turnover less than $10 million (increased from $2 million on 1 July 2016), and
  • the asset was first used or installed ready for use in the income year you are claiming it in.

The increased threshold was due to cease on 30 June 2019.

The instant asset write-off is available for a range of business expenses including but not limited to:

  • Updated technology, computers and printers
  • New office furniture or shop fittings
  • Kitchen equipment or café tables and chairs
  • Trade tools and machinery
  • New and second-hand work vehicles

The increased threshold was due to cease on 30 June 2019. The good news for small business is that the government has now passed a bill into parliament to increase the immediate deductibility threshold to $25,000 from 29 January 2019. 

The even better news is that the threshold has been further increased to $30,000 from 2April 2019 to 30 June 2020.  This will provide an increased incentive for small business investment and growth by providing cash flow benefits and reducing red tape.

As with the increase of the threshold to $20,000 in 2015 it is important to remember that the cost of the asset will need to be less than $25,000 or $30,000 (where applicable) in order to qualify for this immediate write off.

If you have any questions regarding the above, please do not hesitate to call me (Deanne) at our office on 07 5439 0188.

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